Saturday morning, I arrived the Home Fiesta at 9.30am. The auction agent, W, was there to meet me.As I have identified a property that I would like to bid for at the auction, I came prepared with a 5% bank draft of the reserve price. W took me to registration counter to register as a bidder for that property.
At the auction, these terms and conditions were clearly explained to the bidders:
1. The balance of the payment (95% of the final sale price) is to be paid within 90 days.
2. The bank is only responsible for paying any outstanding assessment, quit rent and maintenance fees up to the auction date only. From tomorrow onwards, the successful bidder would be responsible for these fees.
3. There is no vacant possession to be handed over to the successful bidder. In other words, there are no keys to be handed over, the new owner would have to obtain the keys himself.
4. All fees including transfer and assignment, legal fees, stamp duty, admin charges etc are to be borne by the successful bidder.
OK, so about my experience. There were 2 different sessions by 2 different auction houses. The first property at the first session was a factory in Subang Jaya with a reserve price of RM250k. There were 30 bidders. Each bid was RM2000 and it went up very quickly. Finally it was sold at RM436k. Subsequently there were properties with fewer bidders. There were even properties with single bidders so these were sold at the reserve price without competition.
At the 2nd session, the property I was eyeing was also put up for auction first, because there were many bidders. The auctioneer asked for permission to raise the minimum bid from RM190k to a higher figure. One bidder said RM250k, so it was set at that. From then on the bid went up every RM2000. I told myself to stay calm and stick to my target price which I set for around RM280k. If the bid goes beyond my target, I would give up. Still it was very intensive, I only got to raise my hand once. The rest of the time it went so fast the figure on the screen kept on rising. There were 2 bidders at the back who kept competing with each other. When it went over RM300k, many bidders lost interest, including my agent and I. We started talking about other things, thinking that it will stop soon, perhaps around 320k it will be sold. It turned out that after we borak-borak and then listen to the session again, the bidding was still going up! Finally the unit was sold for a whopping RM392k! This was really unbelievable as at iproperty.com.my, units are being put up for sale asking for RM320-330k.
I do not know if the winner got too emotional or he has another motive. From this experience, I learnt that at an auction, as Azizi Ali said in his article, check the market price, set your target and stick to it.
For more information on auction procedures, visit Starproperty: Never been to a Property Auction?